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E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
A N D P E N S I O N L A W
Vol. 3, No. 4: February 28, 2002
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Publisher: LSN Subject Matter Journals
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Editor: PAMELA J. PERUN
Urban Institute
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Topic of This Issue:
To Work or Retire?
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T A B L E of C O N T E N T S
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NEW and FORTHCOMING ARTICLES
"What Keeps Pensioners at Work in Russia: Evidence from Household
Panel Data"
Economics of Transition, Vol. 10, No. 1, February 2002
ALEXANDRE KOLEV
World Bank
European University Institute
Department of Economics
ANNE PASCAL
Universite Paris I Pantheon-Sorbonne
WORKING PAPERS
"Did the Elimination of Mandatory Retirement Affect Faculty
Retirement Flows?"
ORLEY ASHENFELTER
Princeton University
Industrial Relations Section, Firestone Library
National Bureau of Economic Research (NBER)
Institute for the Study of Labor (IZA)
DAVID CARD
University of California at Berkeley
Department of Economics
National Bureau of Economic Research (NBER)
Institute for the Study of Labor (IZA)
"Incentives to Retire Later - A Solution to the Social Security
Crisis?"
FRIEDRICH BREYER
University of Konstanz
Department of Economics
MATHIAS KIFMANN
University of Konstanz
Department of Economics
"How Does Job Loss Affect the Timing of Retirement?"
SEWIN CHAN
New York University
Robert F. Wagner Graduate School of Public Service
ANN HUFF STEVENS
Yale University
Department of Economics
National Bureau of Economic Research (NBER)
"Mortality Change, the Uncertainty Effect, and Retirement"
SEBNEM KALEMLI-OZCAN
University of Houston
DAVID N. WEIL
Brown University
Department of Economics
National Bureau of Economic Research (NBER)
"Why Some Workers Remain in the Labor Force Beyond the Typical
Age of Retirement"
JOHN B. WILLIAMSON
Boston College
Department of Sociology
TAY K. MCNAMARA
Boston College
Department of Sociology
S S R N I N F O R M A T I O N
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EDITORIAL POLICIES
To provide the broadest coverage of research in Employee
Benefits, Compensation and Pension Law we do not referee working
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N E W and F O R T H C O M I N G Articles
_________________________________________________________________
"What Keeps Pensioners at Work in Russia: Evidence from Household
Panel Data"
Economics of Transition, Vol. 10, No. 1, February 2002
BY: ALEXANDRE KOLEV
World Bank
European University Institute
Department of Economics
ANNE PASCAL
Universite Paris I Pantheon-Sorbonne
Contact: ALEXANDRE KOLEV
Email: Mailto:Akolev@worldbank.org
Postal: World Bank
1818 H Street, N.W.
Washington, DC 20433 USA
Co-Auth: ANNE PASCAL
Email: Mailto:Pascal@univ-paris1.fr
Postal: Universite Paris I Pantheon-Sorbonne
90 rue de Tolbiac
75634 Paris Cedex 13, FRANCE
ABSTRACT:
The proportion of working pensioners is high in Russia relative
to what is usually observed in several Eastern and Western
European countries. In this paper, we present an analysis of the
determinants of pensioner employment, using panel data from the
ongoing Russian Longitudinal Monitoring Survey for the period
1994-1999. Given the sharp deterioration in the safety net in
recent years, a particular attempt is made to assess the role of
inadequate pension benefits, along with other individual,
household, and local labor market characteristics, in driving up
the employment rate of older people during transition. Both the
probability of holding a job and the number of hours worked are
modelled. The micro econometric analysis confirms the role of
family income and access to alternative coping mechanisms such
as subsistence farming on pensioner employment for women, but
also stresses for both men and women the importance of age,
education, and health status. Finally, the results show a low
sensitivity of pensioner employment to pension arrears and
pension benefits, indicating that even the full payment of
benefits may be too low to affect significantly the decision to
remain in employment.
Keywords: Russia, pensioners, labor market, employment,
pension benefits
JEL Classification: C33, H55, J14, J21, P36
______________________________
W O R K I N G P A P E R Abstracts
_________________________________________________________________
"Did the Elimination of Mandatory Retirement Affect Faculty
Retirement Flows?"
BY: ORLEY ASHENFELTER
Princeton University
Industrial Relations Section, Firestone Library
National Bureau of Economic Research (NBER)
Institute for the Study of Labor (IZA)
DAVID CARD
University of California at Berkeley
Department of Economics
National Bureau of Economic Research (NBER)
Institute for the Study of Labor (IZA)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=292838
Other Electronic Document Delivery:
ftp://ftp.iza.org/dps/dp402.pdf
SSRN only offers technical support for papers
downloaded from the SSRN Electronic Paper Collection
location. When URLs wrap, you must copy and paste
them into your browser eliminating all spaces.
Paper ID: IZA Discussion Paper No. 402
Date: November 2001
Contact: ORLEY ASHENFELTER
Email: Mailto:c6789@princeton.edu
Postal: Princeton University
Industrial Relations Section, Firestone Library
Princeton, NJ 08544-2098 USA
Phone: 609-258-4040
Fax: 609-258-2907
Co-Auth: DAVID CARD
Email: Mailto:card@econ.berkeley.edu
Postal: University of California at Berkeley
Department of Economics
Room 3880
Berkeley, CA 94720-3880 USA
Paper Requests:
Contact: Mark Fallak, Institute for the Study of Labor (IZA),
P.O. Box 7240, D-53072 Bonn, Germany. Phone:+49-228-3894-0 ext.
223. Fax:+ 49-228-3894-510. Mailto:Fallak@iza.org
ABSTRACT:
A special exemption from the 1986 Age Discrimination Act allowed
colleges and universities to enforce mandatory retirement of
faculty at age 70 until 1994. We compare faculty turnover rates
at a large sample of institutions before and after the federal
law change, and at a set of institutions that were covered by
earlier state laws prohibiting compulsory retirement. Retirement
rates at institutions that enforced mandatory retirement
exhibited sharp "spikes" at ages 70 and 71. About 90 percent of
professors who were still teaching at age 70 retired within two
years. After the elimination of compulsory retirement the
retirement rates of 70 and 71-year-olds fell to levels
comparable to 69-year-olds, and over one-half of 70-year-olds
were still teaching two years later. These findings indicate
that U.S. colleges and universities will experience a rise in
the number of older faculty over the coming years. The increase
is likely to be larger at private research universities, where a
higher fraction of faculty has traditionally remained at work
until age 70.
Keywords: Mandatory Retirement, Faculty, Four Year Colleges
JEL Classification: J26, I21
______________________________
"Incentives to Retire Later - A Solution to the Social Security
Crisis?"
BY: FRIEDRICH BREYER
University of Konstanz
Department of Economics
MATHIAS KIFMANN
University of Konstanz
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=296089
Other Electronic Document Delivery:
http://www.diw.de/deutsch/publikationen/diskussionspap
iere/jahrgang01/
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them into your browser eliminating all spaces.
Paper ID: DIW Berlin Discussion Paper No. 266
Date: November 2001
Contact: FRIEDRICH BREYER
Email: Mailto:friedrich.breyer@uni-konstanz.de
Postal: University of Konstanz
Department of Economics
Fachbereich Wirtschaftswissenschaften
Fach D-135
D-78457 Konstanz, GERMANY
Phone: +49 (0)75 31/88-25 68
Fax: +49 (0)75 31/88-41 35
Co-Auth: MATHIAS KIFMANN
Email: Mailto:mathias.kifmann@uni-konstanz.de
Postal: University of Konstanz
Department of Economics
Fachbereich Wirtschaftswissenschaften
Fach D-135
D-78457 Konstanz, GERMANY
ABSTRACT:
As one possible solution to the well-known financing crisis of
unfunded social security systems, an increase in the retirement
age is a popular option. To induce workers to retire later, it
has been proposed to strengthen the link between retirement age
and benefit level. The present paper is devoted to analyzing the
long-run financial implications of such a reform. We show that
with actuarial adjustments the long-run contribution rate is an
increasing function of the retirement age chosen by workers.
Moreover, the implicit tax paid to the pension system by a
participant can increase in the long run if the retirement age
rises in response to a "steep" adjustment rule. In this sense,
the proposed "cure" may worsen the disease. Finally we propose
an alternative adjustment scheme which avoids these negative
consequences. Finally, we show how the negative effects can be
avoided by forming a capital stock from the additional revenues,
due to later retirement.
Keywords: pay-as-you-go, retirement age, actuarial adjustment
JEL Classification: H55, J18
______________________________
"How Does Job Loss Affect the Timing of Retirement?"
BY: SEWIN CHAN
New York University
Robert F. Wagner Graduate School of Public Service
ANN HUFF STEVENS
Yale University
Department of Economics
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=300742
Paper ID: NBER Working Paper No. W8780
Date: February 2002
Contact: ANN HUFF STEVENS
Email: Mailto:ann.stevens@yale.edu
Postal: Yale University
Department of Economics
P.O. Box 208268
New Haven, CT 06520-8268 USA
Phone: 203-432-3628
Fax: 203-432-5591
Co-Auth: SEWIN CHAN
Email: Mailto:sewin.chan@nyu.edu
Postal: New York University
Robert F. Wagner Graduate School of Public
Service
4 Washington Square North
New York, NY 10003 USA
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
We use the Health and Retirement Study to examine the effects of
job loss on factors affecting retirement incentives, including
earnings, assets and pensions. We then estimate models of the
retirement decision, which take into account the incentive to
retire and any additional effects of displacement that are not
captured by retirement incentives. There are substantial effects
of displacement on retirement incentives as the result of
changes to both earnings and pensions. Displacement
significantly increases the probability of retirement, but only
a small fraction of the displacement-induced changes in
retirement behavior and labor force participation are the result
of workers responding to these altered retirement incentives.
JEL Classification: J6, J2
______________________________
"Mortality Change, the Uncertainty Effect, and Retirement"
BY: SEBNEM KALEMLI-OZCAN
University of Houston
DAVID N. WEIL
Brown University
Department of Economics
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=298266
Paper ID: NBER Working Paper No. W8742
Date: January 2002
Contact: DAVID N. WEIL
Email: Mailto:david_weil@brown.edu
Postal: Brown University
Department of Economics
Box B
Providence, RI 02912 USA
Phone: 401-863-1754
Fax: 401-863-1970
Co-Auth: SEBNEM KALEMLI-OZCAN
Email: Mailto:sebnem.kalemli-ozcan@mail.uh.edu
Postal: University of Houston
Houston, TX 77204 USA
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
We examine the role of changing mortality in explaining the rise
of retirement over the course of the 20th century. We construct
a model in which individuals make labor/leisure choices over
their lifetimes subject to uncertainty about their date of
death. In an environment in which mortality is high, an
individual who saved up for retirement would face a high risk of
dying before he could enjoy his planned leisure. In this case,
the optimal plan is for people to work until they die. As
mortality falls, however, it becomes optimal to plan, and save
for, retirement. We simulate our model using actual changes in
the US life table over the last century, and show that this
'uncertainty effect' of declining mortality would have more than
outweighed the 'horizon effect' by which rising life expectancy
would have led to later retirement. One of our key results is
that continuous changes in mortality can lead to discontinuous
changes in retirement behavior.
JEL Classification: E21, I12, J11, J26
______________________________
"Why Some Workers Remain in the Labor Force Beyond the Typical
Age of Retirement"
BY: JOHN B. WILLIAMSON
Boston College
Department of Sociology
TAY K. MCNAMARA
Boston College
Department of Sociology
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=290095
Other Electronic Document Delivery:
http://www.bc.edu/bc_org/avp/csom/executive/crr/papers
/wp_2001-09.pdf
SSRN only offers technical support for papers
downloaded from the SSRN Electronic Paper Collection
location. When URLs wrap, you must copy and paste
them into your browser eliminating all spaces.
Paper ID: Boston College CRR Working Paper No. 2001-09
Date: November 2001
Contact: JOHN B. WILLIAMSON
Email: Mailto:JBW@bc.edu
Postal: Boston College
Department of Sociology
McGuinn Hall 424
140 Commonwealth Avenue
Chestnut Hill, MA 02467 USA
Phone: 617-552-8530
Fax: 617-552-4283
Co-Auth: TAY K. MCNAMARA
Email: not available
Postal: Boston College
Department of Sociology
140 Commonwealth Avenue
Chestnut Hill, MA 02467 USA
Paper Requests:
Contact Andy Eschtruth, Assoc. Dir. External Relations, Center
for Retirement Research, Boston College, Fulton Hall 550,
Chestnut Hill, MA 02467-3808. Phone: (617)552-1729. Fax:
(617)552-1750. Mailto:eschtrut@bc.edu
ABSTRACT:
This study explored the ways in which race, gender, and age
moderated the effects of several determinants of labor force
participation among people ages 60 to 80. The role of race,
gender, and age in moderating the effect of various factors on
labor force participation was examined using the 1998 Health and
Retirement Study (HRS) data. Binomial logistic regression models
were used to evaluate the interaction between race, gender, age
and other determinants of labor force participation. The effects
of various factors on labor force participation differed by
gender, race, and age. The negative effects of low education and
poor health, respectively, were stronger for women and blacks.
Also, the positive effect of low non-wage income was weaker for
older workers, probably due partly to poorer health. Our
findings suggest that different types of policies would help to
encourage labor force participation among different groups.
Because lack of access to employment may deter continued work
among subgroups such as blacks and women with low education, job
training or job search programs might provide incentives for
employment in these groups. Additionally, employer flexibility
regarding part-time work and work demands might make continued
work attractive for more older workers.